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Plight of sugarcane growers
Due to differences between sugar
cane growers and sugar mill owners, the sugar cane
crushing season would start about a month and a half later
than usual. After cotton, sugar cane appears to be the next
crop in crisis. On 18th October a meeting of sugar cane
growers and sugar mill owners was scheduled to be held under
the chairmanship of provincial agriculture minister. Although
sugar cane growers did go to attend the meeting, the sugar
mill owners failed to turn up. In the meeting it was decided
that sugar cane crushing season should talk to from October
25. All Pakistan Sugar Mill's Association has taken stand that
it has already been decided to start sugar cane crushing from
Nov. 15th. The two representative organizations of farmers,
Sindh Chamber of Agriculture and Sindh Abadgar Board remarked
that no such decision was ever made.
The root of the trouble lies in the fact that due to
increasing retail prices of sugar in the country the
government, like last year, imported 700,000 tons of sugar,
because retail price of sugar had reached Rs. 27 / kg, and
government was anticipating that the price may reach Rs. 30 /
kg. Last year the Punjab produced 1.904 million tons and the
Sindh produced 1.102 million tons of sugar. The total
production of sugar in the country
was 3.06 million tons. Anticipating the price increase by the
traders and mill owners for consumers the government
deregulated the duty and imported 0.7 million tons of sugar,
increasing the total availability of sugar in the country to
3.7 million tons. Moreover, sugar mills also had stocks from
sugar produced in the country during previous year. The
consumption of sugar in the country is about to 2.7 to 2.8
million tons per year. Interestingly at the moment about to
one million tons of surplus sugar is
available in the country, sufficient for five months
consumption at the rate of 0.2 million tons per month. Out of
these one million tons of sugar at least 0.3 million tons was
stockpiled by traders and 0.6 million tons was kept by the
sugar mills. Due to this availability the sugar prices did
drop by Rs. 4-5, which ran shivers among sugar mill owners and
industrialists. The sugar mill owners are pressing the
government to at
least purchase 0.2 - 0.3 million tons of their sugar.
Otherwise, they have threatened, they will not start the sugar
cane crushing as 0.6 million tons of sugar mean Rs. 14 billion
and that is a large amount of our sugar cane mill owners. And
they are reluctant to invest more money into the sugar
production by starting the sugar cane crushing. Sugar mills
want to wait to dispose off their present sugar stocks as the
sugar cane crushing season of China and Indochina, especially
Thailand, is about to begin towards the end of November. The
sugar mill owners want to sell out their sugar stocks before
arrival of fresh sugar in the international market. The
government is reluctant to buy sugar stockpile from sugar
mills at prices dictated by them. The story does not stop
here. The country excepts bumper sugar cane crop this year and
estimated 47 to 48 million tons of sugar cane is expected this
year which means that we will be able to produce 3.0 - 3.5
million tons of sugar whereas the maximum sugar consumption in
the country is the not above 2.8 million tons. Keeping this
scenario of expected sugar
production and consumption in the country the sugar mill
association is reluctant to start crushing season. They have
written to the federal minister for trade and commerce to
direct the Trading Corp. of Pakistan to buy at least 0.2
million tons off sugar at once.
The mismanagement of sugar availability of in the country,
production and stockpiling has resulted in catastrophe about
to be faced by sugar cane growers. The weakest position among
the stakeholders will be that of sugar cane growers as they
have to keep the crop long one year from sowing to maturity in
spite of their poor economic conditions. They might not to be
in position to keep the crop in their field any longer.
The problem of sugar mill owners and traders is
understandable. What is not
understandable is the fact that why did the government allow
the sugar mill owners and traders to increase prices of the
retail sugar to the extent that to it became unaffordable for
consumers and then why did the government imported sugar even
though large amount of sugar were still lying with sugar mills
and traders. The government first allowed mill owners to earn
huge profits and then imported sugar to what they call,
'stabilize prices', providing a pretext to them to manipulate
sugar cane
price. Such profiteering as well as sugar import was not
permissible and should not have been allowed by the government
as 0.35 million tons of sugar was lying in the stores of
traders and sugar mill owners. To import 0.7 million tons of
sugar under these circumstances was against the interest of
country. Not only huge foreign exchange was spent on these
imports but also that now rural and the agricultural economy
is about to be affected adversely. These things were
avoidable. Economists reject the
claim of industrialist that Rs. 23 are spent on production of
one kg of sugar. The need of hour is to stop the ship of rural
economy from sinking. One way out could be that to government
should provide credits to sugar mill against their stored
sugar stockpiles so that they can start crushing of sugar cane
at the earliest. If the farmers are producing food staff items
in surplus it does not means that instead of rewarding them
the same
should be used to punish them. It is imperative to save the
agriculture sector from further economic jolts otherwise any
damage to this sector may leave inerasable marks on national
economy.
Courtesy daily Kawish
November 2, 2001
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